B. If the saving effected be used to create fixed capital, there is as much consumption of goods, the same support of employed workmen, the same sale for industrial articles as in the previous unproductive consumption; only, there the stream is usually conducted into other channels. If a rich man now employs in house-building what he formerly paid out to mistresses; masons, carpenters, etc. earn what was formerly claimed by hair-dressers, milliners, etc.: there is less spent for truffles and champagne and more for bread and meat. The last result is a house which adds permanently either to personal enjoyment, or permanently increases the material products of the nation's economy.[220-4] And it is just so when the wealth saved is used as circulating capital. Here, the wealth saved is consumed in a shorter or longer time; and to superficial observers, this saving might seem like destruction; but it is distinguished from the last by this, that it always reproduces its full equivalent and more. However, the whole quantity of goods brought into the market by such new capital cannot be called its product. Only the use (Nützung) of the new capital can be so called; that is the holding together or the development in some other way of other forces which were already in existence until their achievements are perfected and ready for sale.[220-5] [220-6]
[220-1] What evil influences such saving can have may be seen from Prussian frugality in its military system before 1806.
[220-2] The custom of burying treasure is produced by a want of security (compare Montanari, Delia Moneta, 1683-87, 97 Cust.), and by an absence of the spirit which leads to production. As Burke says, where property is not sacred, gold and silver fly back into the bosom of the earth whence they came. Hence, in the middle ages, this custom was frequent, and is yet, in most oriental despotic countries. (Montesquieu, E. des L., XXII, 2.) And so in Arabia: d'Arvieux, Rosenmüller's translation, 61 seq. Fontanier, Voyage dans l'Inde et dans le Golfe persique, 1644, I, 279. A Persian governor on his death bed refused to give any information as to where he had buried his treasure. His father had always murdered the slave who helped him to bury his money or any part of it. (Klemm, Kulturgeschichte, VII, 220.) In lower stages of civilization, it is a very usual luxury to have one's treasures buried with the corpse. In relation to David's grave, see Joseph., Ant. Jud., VII, 15,3, XIII, 8, 4; XVI, 7, 1. Hence the orientals believe that every unknown ruin hides a treasure, that every unintelligible inscription is a talisman to discover it by, and that every scientific traveler is a treasure-digger, (v. Wrede, R. in Hadhramaut, 113, 182 and passim.) Similarly in Sicily. (Rehfues, Neuester Zustand von S., 1807, I, 99.) In the East Indies every circumstance that weakens confidence in the power of the government increases the frequency of treasure-burial, as was noticed, for instance, after the Afghan defeat. Treasure-burial by the Spanish peasantry (Borrego, translated by Rottenkamp, 81), in Ireland (Wakefield, Account of I. I, 593), in the interior of Russia (Storch, Handbuch, I, 142), and among the Laplanders. The custom was very much strengthened among the latter when, in 1813, they lost 80 per cent. by the bankruptcy of the state through its paper money. (Brooke, Winter in Lapland, 1829, 119; compare Blom, Statistik von Norwegen, II, 205.) As during the Thirty Years' War, so also in 1848, it is said that large amounts of money were burned by the Silesian and Austrian peasantry. Much of it is lost forever, but, on the whole, much treasure is wont to be found where much is buried; governments there make it a regal right to search for it.
[220-3] If the hoarding takes place in a time of superfluity, and the restitution of the stores in a time of want, there is of course no detrimental disturbance, but on the contrary the consequence is a beneficent equilibrium of prices. This is the fundamental idea in the storage of wheat.
[220-4] In the construction of national buildings, etc., we have the following course of things: compulsory contributions made by taxpayers, or an invitation to the national creditors to desist somewhat from their usual amount of consumption, and to employ what is saved in the building of canals, roads etc. In France, for instance, after 1835, 100,000,000 francs per annum. (M. Chevalier, Cours, I, 109.) The higher and middle classes of England saved, not without much trouble, however, between 1844 and 1858, £134,500,000 in behalf of railway construction. Tooke-Newmarch.
[220-5] Such savings have sometimes been prescribed by the state. In ancient Athens many prohibitions of consumption in order to allow the productive capital to first attain a certain height. Thus it was forbidden to slaughter sheep until they had lambed, or before they were shorn. (Athen., IX, 375, I. 9.) Similarly[TN 47] the old prohibition of the exportation of figs. (Ibid., III, 74.) Compare Petit. Leges. Atticae, V, 3. Boeckh, Staatshaushaltung, I, 62 seq.
[220-6] The process of the transformation of savings from a money-income, in a money-economy (Geldwirthschaft), into other products, more closely analyzed in v. Mangoldt, V. W. L., 152 ff.
LIMITS TO THE SAVING OF CAPITAL.
It may be seen from the foregoing, that the mere saving of capital, if the nation is to be really enriched thereby, has its limits. Every consumer likes to extend his consumption-supply and his capital in use (Gebrauchskapitalien); but not beyond a certain point.[221-1] Besides, as trade becomes more flourishing, smaller stores answer the same purpose. And no intelligent man can desire his productive capital increased except up to the limit that he expects a larger market for his enlarged production. What merchant or manufacturer is there who would rejoice or consider himself enriched, if the number of his customers and their desire to purchase remaining the same, he saw his stores of unsaleable articles increase every year by several thousands?